Recruiters! We must learn to sell why we are still relevant

Let’s not fool ourselves. We are not a loved profession. Clients often use us begrudgingly, some even with open hostility. I have sat in client board-level meetings and heard with my own ears, the resentment felt towards our industry. I have listened, squirming, while clients plan to avoid using recruiters and any third party staff providers.

Even before the downturn, the evidence was all around us. The rise of internal recruitment teams, the clear strategy to reduce use of outside agencies, the development of employer branding strategies, the money spent on corporate recruiting websites and on developing internal recruiting software. And of course, the increased use of referral programmes and rewards for internal hires.

Increasingly, clients do not see value in what we do. Research tells us they think we are too expensive, they don’t like our pricing and they are pushing back on it like they never have done before. Clients think we are too slow and they also believe all recruiters have access to the same talent pool as each other, and also as they do. In some cases they are right.

And then the recession came along and just added fuel to the fire. Now employers talk openly and aggressively about cutting recruiters out of their hiring strategies altogether. In a recent Tele-Seminar I did, hosted by Mark Whitby , we had 500 people on the call, and a big percentage of those wanted an answer to this question…

“How can we convince clients to use our services instead of doing it themselves?”

Well, the first thing to understand is that this move to eliminate the use of recruiters gains momentum during every downturn. The market softens, clients see more talent availability, the CEO demands spending cuts, and suddenly every employer is confident they can save a bundle by doing all their hiring themselves.

It’s a well-worn pattern. And it is a threat to recruiters. Well, it is if we allow it to be. Our challenge is to make sure we offer something different. Something clients can’t do themselves at all, or can’t do themselves at a reasonable cost to their business.

But its also important we are articulate enough and confident enough to communicate to clients the three primary reasons why doing the recruitment internally is a costly and self-defeating exercise.

Getting the client to understand their true cost of trying to hire themselves

Explaining to clients the true significance of our value-adds

Explaining to clients about passive candidates and how we access them

Most employers have never really analysed how much it costs them to take on recruitment themselves. They look at our fee, recoil in shock, and say it must be cheaper doing it internally. We have to be skilled in communicating to clients the full range of both direct and indirect costs that make up the real cost of hiring. Direct costs include many of the obvious things, such as advertising, the cost of executive and support staff time on screening, interviewing debriefing and reference checking, These add up fast and can way exceed the cost of any agency fee on their own. But you also need to factor in indirect costs such the opportunity cost of the senior executive spending time reviewing 50 resumes instead doing the job they are really employed to do. During the last recession I had a chart, ready to present to clients, outlining all the cost of “going it alone”. I had dollar figures against each activity, and very soon the cost of recruiting by the company far exceeded that of an agency fee. And what if the chosen candidate turns the job down or leaves after a few weeks? What is cost to the company of doing the whole exercise again?

The second theme that a skilled recruiter needs to communicate to a client who may want to avoid using our services, is the ability to showcase the many value adds that good recruiters offer their clients. This may include salary surveys, compensation advice, and market insights, but it will extend further to helping to define the role being recruited, acting as an advocate for the client with hard to hire candidates who are spoiled for choice, and playing the role of third party mediator to ensure an offer will actually result in an acceptance. These are invaluable components of our service, which are built into our fee – we don’t charge more for them – but many clients do not have these benefits explained and highlighted by the recruiting firms themselves.

Finally, passive candidates. And this is the clincher because when all is said and done, it’s access to great candidates that drives clients to use recruiters in the first place. Employers can naively believe that by placing an ad on a job board they have “done what any recruiter would do”. Not so. Job boards, by definition, only tap into the active job market. Nothing wrong with that, but it’s the cream of the entire available market that every client really wants to choose from. And only great recruiters are using all channels all the time to farm the talent pool. A good recruiter is always sourcing, 365 days a year. And while job boards may be part of the talent sourcing mix, there will be a huge range of other tactics, including social media, networking, database search, research and head hunting, and many more mechanisms designed to ensure the very best talent are unearthed.

When you think about it, it really is no contest.

A good recruiter saves a client time and money, provides a raft of benefits and value-adds that go way beyond actually providing resumes. And on top of this we ensure access to a talent pool that is increasing difficult for employers to reach.

6 Comments

We justify what we earn by the sevice we provide. Over the boom years recruiters overcharged for the service offered in my opinion. This isn't about high percentages, rather a reflection of value. An internal recruier can pos an ad on a job board. An internal recruiter can go o a cv database and source themselves. If that is he extent of the service you offer can you really justify anything other than a very low percentage fee, where your total annual fees don't ammount to much more than an internal recruiters salary.
We can and should do much more than his as recruiters. We need to have expert knowledge in our recruitment space. Properly understand he candidate pool and our clients current and future requirments. We need to be a trusted advisor and independent enough to give best advice as to how to hire the right candidate. This genuinely adds value and justifies our worth because we do what our clients can't.
If you want to hold your fees, make sure your clients know the total work you put in when working for them, and make sure you are doing more for them than they could do for themselves.
Holding our fees is not about what we say or sell, it is much more about what we do. Create a service that your clients are desperate not to lose, and charge them accordingly.
Last tip, don't alk fees, talk invesment. That is after all what it is.
Bill

Hi Greg,
Enjoyed the post. How about when the company has an internal Recruitment Team. ie full time Recruiters, not procurement or frustrated HR types, but actual Recruiters?
I'm interested as I am one of those in house Recruiters, and essentially it is my job to do all the finding and develop attraction strategies. What above and beyond do you offer my type of companies. I am always interested in well thought out, value add, different spiels.
I love the last line though.. definitely something missing a lot in our industry. Trust in your value add people and don't be afraid of letting people know.
Cheers Dan

Hi Dan,
Good question. The truth is that smart recruiters need to assess where it is that they bring most value. Not all companies will need recruiters equally. Certainly a corporate with an effective in-house recruiting team MAY need third party recruiters less. But that is seldom totally true. Many of our biggest clients have large in house teams of very effective recruiters
I think the value still comes where the recruiter is deeply specialised. Even for a client with a team of recruiters, I feel its true that a company like Aquent who have 70 offices around the world, focused on a niche (marketing and design) is better equipped to access highly specialised talent - especially passive or internationally based people. So there is a big value-add in that capability.
Its also true that no in-house recruitment team I have ever encountered can match the talent pool and all-round effectiveness of a quality recruitment company when it comes to temporary and contract needs. Having highly specialised, tested, referenced checked short term resources available at less than a days notice is a facility few corporate recruiters would be able to match. No criticism of those recruiters obviously, but it's a massive task to build an effective temporary staffing business.
Other areas that a good recruiter adds value, even to an in-house team, include
â€¢ Skill set availability â€” what skills are hot in the market and who has them?
â€¢ Industry demand â€” which sectors are competing for the best talent?
â€¢ Project â€œsex appealâ€ â€” what do the best talent like to work on (our designers want â€œcoolâ€ work for e.g.)
â€¢ Required turn round times-how quickly can we access key hires ( speed at which packaging designers get snapped up for e.g)
â€¢ Salaries and benefits and trends in reward and compensation
â€¢ Retention and staff development strategies
â€¢ Corporate perceptions â€” of your client that is. Where are the gaps in the clients employer brand?
â€¢ Hiring and retention ratios-how many people should they interview to hire. What is staff turnovers like in THEIR industry
â€¢ New techniques and tactics emerging â€” what are their competitors doing to attract staff? To retain people? To reward staff?
In summary though this is the point. To sell to a corporate client (any client actually) the recruiter must firstly identify the clients needs. What do they lack? What do the need to achieve their talent goals? Then it's the recruiters job to showcase what THEY have that meets those needs. And it may not be "just resumes"
Cheers
Greg

Great article and response Greg
Many of my clients have large in-house recruiting teams.... but I specialize in a very small segment of the marketplace
MD's in pharma and biotech space after well over decade I have relationships with many of them. This is critical staff to drug development so clients understand to need to reach out to passive candidates with this specialize expertise.
We also point out to clients are do not want to fill every job and that every job should not go out to search...... (I know many people do not agree with this but it is our model)

Hi Greg and Dan,
I would like to add one further point about what an agency can offer even the very best in-house recruitment team- information on what the rest of the market thinks of candidates. What do I mean by this? Well, one thing that we are doing all the time that in house recruiters are not doing is talking to their competitors and peers who move in the same industry circles. In-house teams engage two dimensionally, i.e. company to candidate. We engage on a whole new level- company to client to competitor to peers to candidates, the entire market top to bottom.
Often we come across people who have the gift of the gab, they look good, appear to be fantastic and during the process of speaking with them and helping them find work, information slowly starts to come to light from other industry peers. Peers who may never act as referees because they left the company that our seeming perfect candidate was working for. The relationships we build with people allow for free and frank conversations and I have often had calls from candidates I am very friendly with who have said thing like, ‘Be careful, I wouldn’t touch that candidate with a barge pole. Don’t stake your reputation with so-and-so’ etc. I work in a very small market and having inside knowledge is vital. During the recession when firms preferred to, or had to do recruitment themselves, my colleagues and I often received calls asking us to run our eyes over the final shortlist, just to make sure there is something we might know about the candidate that they didn’t. We gave our opinions freely and honestly with the company’s interest in mind and it has really paid off. Many of our clients have gone on their own, made the hires and lost the money and time because they have got it wrong (how were they to know that they were being duped by a candidate who was misrepresenting themselves??) These companies now find the money in the budget to pay our fees and have us manage the process with them in a consultative way.
Hope that makes sense. Thanks for another great article.
William

The key in a market like this is our ability to access those candidates who are not actively looking , especially when hiring managers are working their butts off doing their jobs.
Anyone can do it themselves, but will only hire the best of who has applied to that ad - not a particularly comforting thought now is it for long term competitive growth through aggressive talent acquisition
Earlier posts have discussed which clients to fire, and this is an excellent way to work out who is worth investing in.

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GREG SAVAGE

With a career spanning four decades, Greg is a founder of 4 highly successful businesses, is a trusted advisor and respected voice across the global recruitment and professional services industries, and a regular keynote speaker at conferences around the world.